Sorry, We Can’t Pay Your Claim. Our Records Show That You Are DEAD.

In my work as a attorney representing insurance claimants, I have seen and heard some pretty outrageous stories. Many potential clients call me with tales the average person would find simply too outrageous to believe. Here is one such story (and in fact quite similar to a situation experienced by a former client of mine), brought to you by the Oregon Legislature.

Pay particular note to Ms. Suzuki at 8:32, where, in response to her insurer telling her they won’t pay her (because their records show that she is dead), she declares, “I am still alive!!”

If you can’t manage to watch the entire video (although I highly recommend it – it is concise and easy to listen to), here is a recap.

During a hearing to support a bill which will give more authority to the Oregon Insurance Commissioner and subject insurers to the Unfair Trade Practices Act (Bill SB 719), Oregon Representative Brian Clem brings in his mother-in-law to testify about the unfair treatment she has received from insurer Regence.

Rep. Clem’s mother-in-law, Azusa Suzuki, suffered injuries in a car accident over seven years ago. She filed a claim with her health insurer, Regence. Regence refused to pay. Why? Because according to their records, Ms. Suzuki was DEAD. Regence informed her that she had been dead for over nine months.

Beyond the ridiculousness of telling someone they are dead, what happened here? According to Regence, “someone” called them and informed them that Ms. Suzuki was deceased. Apparently all it takes to cut you off from your insurance is for “someone” to call your insurer and inform them you are deceased. No proof required. That fact alone is a bit worrisome.

Even if You ARE Alive, We Still Won’t Pay You

Further, Regence surmised that even if Ms. Suzuki could prove she was alive, it made no difference, because she hadn’t paid her insurance premium for nine months. Her insurance policy had been cancelled. Why hadn’t Ms. Suzuki paid her premiums? Because when Regence determined she was dead, they cancelled the auto-pay from her bank account. She hadn’t even noticed, since the payment amount was quite small (approx. $20/mo for supplemental health coverage), and because her late husband had left several open bank accounts she was having a difficult time keeping track of. That, and Regence never sent her a notice that it was cancelling her coverage.

Is this merely administrative bungling over at Regence? Sure, it could be characterized that way. But what is really troubling is how Regence dealt with it. Rather than admit mistake and reinstate Ms. Suzuki, they 1) continued to argue that she was dead, and 2) held fast to the non-payment of premiums as a reason she was not covered at the time of the accident. THEY NEVER PAID HER A DIME.

So, fast forward to 2013, where her son-in-law is now an Oregon state representative, and he brings this ludicrous situation to the attention of the goverment.

The History of Ms. Suzuki’s Claims Process

Rep. Clem explains the channels he went through in an attempt to get Ms. Suzuki’s claim paid. First, he wrangled with Regence. When that didn’t help, he contacted the Oregon Insurance Commissioner. The Oregon Insurance Commission is charged with the duty of monitoring and regulating the acts of insurers engaged in the business of selling insurance in Oregon. The Commission contacted Regence. Nothing happened. The Commission said there was nothing they could do.

Many years later, Rep. Clem becomes an Oregon Representative. He supports a bill that will give the Oregon Insurance Commissioner the power to pursue the transgressions of insurers under the existing Unfair Trade Practices Act. Funny enough, the insurance industry currently has an exemption to the act, meaning they are not being regulated like every other company doing business in Oregon. This virtual non-regulation of insurers is very common in the United States, as the federal government has left regulation up to the states, and individual states have neglected to monitor insurers with any noticeable force.

At 10:40 in the video, Senator George (Republican) is incredulous, calling Ms. Suzuki’s plight a “pretty outrageous situation” and asking if Rep. Clem had any response from Regence about “moral obligation”? The answer was no. However, now that Rep. Clem has taken this all the way to the Oregon State Legislature, with a Bill meant to prevent it from happening in the future, he has received a phone call from the CEO of Regence, asking to meet with him.

It only took seven years and the force of the Oregon state legislature…

Footnote: Why Don’t We Hear More Stories Like This?

The vast majority of cases like this are settled, out of court, and the settlement agreement stipulates that the insured is not allowed to speak about what happened. Insurers settle the cases that would bring particularly bad press, and make sure no one talks about it to the media.

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